Starting and Sustaining Savings Accounts
Snowflakes are one of nature’s most fragile things, but just look what they can do when they stick together.
Although one snowflake doesn’t seem like a whole lot of anything, with enough sticking together you can build a snowman and enjoy a winter wonderland. Saving money works in the same way – although each contribution may seem small and insignificant, when they all come together over time you can have enough to weather any storm.
Starting a Savings Account
Before you start saving, think about where your money will go. Savings accounts are modest interest-bearing deposit accounts designed to hold money not used for everyday expenses. To set one up, online or in-person, you will need your personal information (name, address, email, phone number, and social security number), valid government I.D., and your bank’s account and routing numbers.
Find the best option for you by comparing features. Look out for fees, including maintenance, monthly, or inactivity charges, as well as withdrawal restrictions. Search for accounts offering competitive interest rates and reasonable minimum balance requirements – look into credit unions or community banks for lower minimums than big banks. Research the account’s mobile access options, including app features and mobile deposits.
After the where, comes the how – How will you maximize the benefits of your savings account? Set up a realistic game plan for using it and building towards your financial goals.
- Start small and build up gradually. Start by saving $20/month through an automatic transfer, then every three months increase the amount saved by at least $5.
- Make savings an item in your budget. Add “savings” to your budget as if it were another routine expense. Or, after paying off a debt, continue making “payments” by saving the same amount.
Teaching Saving Habits
And just like building a snowman – it is more fun when the whole family is involved! Engage your children by teaching them the importance of saving.
- Visualize savings goals. Use a modified envelope system. Have them draw a picture of the item they want on an envelope (or a jar so they can actually see the money being saved).
- “Match” additional saving. After setting up an agreed upon saving goals, match any amount your child saves beyond that amount.
May the winter weather bring you and yours joy and peace – take in the snowfall, grab a cup of hot chocolate, and spend just a little bit of time thinking about how you can build your own savings.
Money Management E-Newsletter: December 2017